There are three types of Mushrooms; Red, Green, and Blue. They can be used as vegetables/filler in Crock Pot recipes, burned as Fuel, or given to a Pig to produce Manure. Each mushroom has different effects on Health, Hunger, and Sanity.
Mushrooms can only be picked at certain times of the day:
Each Mushroom will re-grow after 10–20 hours of Rain. They can also be dug up at any time using a shovel to obtain two mushrooms, but mushroom spawn will be destroyed. Mushrooms do not grow during winter.
Rings of Mushrooms can be found in some worlds. These resemble Fairy Rings that can be found in reality.
Blue Mushrooms are good for regenerating health when raw, or retaining sanity when cooked. Green Mushrooms are good for going insane when raw, or regaining sanity at minimum cost when cooked. Red Mushrooms are good for giving to Pigmen and using as Crock Pot filler.
Although they are considered vegetables in Don't Starve, mushrooms are body parts of fungi, and are technically not plants.
If a mushroom is picked as it sinks into the ground, the player will receive a mushroom but the hole the mushroom left would look like the mushroom is still there and sleeping. The player will still view the mushroom as if it were picked already.